Health labs hit by cash crisis

By THANDI SKADE Time of article published Feb 1, 2012

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At least six National Health Laboratory Service (NHLS) labs have been shut because of the service’s cash crunch.

The labs were closed because the service – the sole service provider contracted to deliver laboratory diagnostic tests; screening for chronic diseases, including HIV and cervical cancer; and services for all public healthcare facilities – is owed R2.1bn in outstanding service bills from provincial health departments.

Gauteng and KwaZulu-Natal collectively owe R1.7bn, or 82 percent, of the total amount outstanding. Both provinces are also the slowest to pay back their debts, with payment delays as long as 200 days late for Gauteng and 315 days late for KZN.

Gauteng owes R709.4m, while KZN is in debt to the tune of R1.06bn.

NHLS CEO Sagie Pillay said three labs in each of the two provinces were shut at the beginning of the year.

“It’s a very dire situation at the moment. We are seriously concerned about our staff and how it impacts on them,” he said.

For now, staff from closed-down labs have been deployed to labs within a 15 to 20km radius. Pillay said services provided to the public would not be compromised. “We’re working with all provinces to reduce our expenditure patterns without compromising quality or access to patients,” he said.

Despite a promise to pay R90m for the month of January, the Gauteng Department of health has made only a payment of R25m.

The service needs at least R350m a month to cover its operational costs, and they themselves are in debt, owing creditors around R700m as a result of the “erratic payment environment” they are faced with.

A further 20 labs in Gauteng and 25 labs in KZN are expected to be closed in the next three to four weeks.

Mike Waters, the DA’s spokesman on health, said the lack of payment was jeopardising the overall viability of the service.

“This is a national disaster for our healthcare system, which is being held to ransom as a result of bad finan-cial management in select provinces… The health system relies on the NHLS to be quick and accurate in processing diagnostic tests.”

Pillay said that to cut costs, all vacancies were frozen and the training of registrars, technologist and technicians had been suspended. While the National Treasury has approved an overdraft for the NHLS, it must be paid back by March 31, which Pillay said was “impossible”.

The Gauteng Department of Health could not be reached for comment. - The Star

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